Keys to the PROFITABLE TRADING II. - Rejections and Price Action
In the last chapter I showed you where to find some of the profitable entries. Today I want to add the price action element.
As I can see, there is not too popular to read price charts in the old school way but I think it is a bit pity. Price action has still the same potential as it used to have years and decades ago.
What to look at if you want to catch some kind of reversal at the prior point of Quick Rejection:
1. How quickly does the price move to the Rejection.
2. How confident does the move to the prior point look like.
Let't look at the examples on the chart:
A)
1. Very strong bar from the low of the swing but with longer upper tail - it looks like some kind of news or so. Not tradeable yet. Even though these moves tend to reverse to the mean.
2. After the prior strong move UP NO continuation. - Weak bar with no strenght to break the point of QR.
B) Much slower price action. The price qoes UP to the QR with several long upper tail bars.
1. Test with trend bar - NO Entry for me.
2. Nice Rejection - Nice one!
C) Price goes down quite slowly. Nice possibility for entry on reversal on bar 2.
D) Slow move UP with many upper tail bars.
1. Nice Entry which would finish in loss.
2. Very nice reentry - rejection on an upswing.
E) Price moves quickly UP. No continuation on the H of swing but for me NO trade.
F) After retest of prior bigger Rejections (Ff) and move UP there was a small rejection. Price tested this rejection and breaked UP strongly. Nice one.
G) NO Entry for me. Quick bearish price action.
H) NO Entry. Quick bullish price action.
I) Nice trade. A bit different than the two prior ones but very strong market structure.
- two rejections
- the market in a slow channel/trading range -> it is mostly good idea to trade against the break out of trading range
J) Very similar like the prior one.
K) This situation could look similar like the two prior ones. BUT watch the Price Action before test. STRONG BREAKOUT! NO ENTRY.
And so on...
Hope I clarified the principle, how a trader can wait for one of the best price action entry - testing prior UNTESTED point of Quick Rejection.
It really is that simple. One just need to read the price before and after the test of QR.
Price Action reading skills ARE important. Let's look at them in the following chapters!
Thanks for reading!
Any questions bellow, please.
Paul
As I can see, there is not too popular to read price charts in the old school way but I think it is a bit pity. Price action has still the same potential as it used to have years and decades ago.
What to look at if you want to catch some kind of reversal at the prior point of Quick Rejection:
1. How quickly does the price move to the Rejection.
2. How confident does the move to the prior point look like.
Let't look at the examples on the chart:
A)
1. Very strong bar from the low of the swing but with longer upper tail - it looks like some kind of news or so. Not tradeable yet. Even though these moves tend to reverse to the mean.
2. After the prior strong move UP NO continuation. - Weak bar with no strenght to break the point of QR.
B) Much slower price action. The price qoes UP to the QR with several long upper tail bars.
1. Test with trend bar - NO Entry for me.
2. Nice Rejection - Nice one!
C) Price goes down quite slowly. Nice possibility for entry on reversal on bar 2.
D) Slow move UP with many upper tail bars.
1. Nice Entry which would finish in loss.
2. Very nice reentry - rejection on an upswing.
E) Price moves quickly UP. No continuation on the H of swing but for me NO trade.
F) After retest of prior bigger Rejections (Ff) and move UP there was a small rejection. Price tested this rejection and breaked UP strongly. Nice one.
G) NO Entry for me. Quick bearish price action.
H) NO Entry. Quick bullish price action.
I) Nice trade. A bit different than the two prior ones but very strong market structure.
- two rejections
- the market in a slow channel/trading range -> it is mostly good idea to trade against the break out of trading range
J) Very similar like the prior one.
K) This situation could look similar like the two prior ones. BUT watch the Price Action before test. STRONG BREAKOUT! NO ENTRY.
And so on...
Hope I clarified the principle, how a trader can wait for one of the best price action entry - testing prior UNTESTED point of Quick Rejection.
It really is that simple. One just need to read the price before and after the test of QR.
Price Action reading skills ARE important. Let's look at them in the following chapters!
Thanks for reading!
Any questions bellow, please.
Paul